help with dividends!!!!!!!!!!!?

Question

60,000 @ $1 par value common stock
20,000 shares cumulative 7%
200 par per stock
2.00 share dividend

How much dividend was paid to each shareholder??

Answer 1

Your question was very patchy. I'll have to make some assumptions. There are 60,000 shares of $1 par value common stock outstanding. In addition, there are 20,000 $200 par value 7% cumulative preferred stock. Preferred stockholders received $2 dividend per share.

To start, preferred stockholders must be paid their dividend first before the common stockholders. If there are 7% cumulative preferred stockholders, they should get $200 x 7% of dividend per preferred share, or $14 dividend. If they only received $2 dividend per share, there is dividend in arrears of $12 per share and the common stockholders get nothing.

So, preferred stockholders got $2 dividend per share and common stockholders got no dividend.